The Rotten-Kid Theorem Meets the Samaritan's Dilemma
A familiar result in the economic theory of the family is Becker's rotten-kid theorem. This theorem states that altruism by a family member will lead other selfish members to act efficiently from the family viewpoint. The authors extend Becker's one-period model to two periods and show that parental altruism can result in an inefficiency known in other contexts as the Samaritan's dilemma. Implications of this for transfer arrangements within the family and for the Ricardian equivalence theorem are drawn. Copyright 1990, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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- Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985.
"The Strategic Bequest Motive,"
Journal of Political Economy,
University of Chicago Press, vol. 93(6), pages 1045-76, December.
- Gary S. Becker, 1974.
"A Theory of Social Interactions,"
NBER Working Papers
0042, National Bureau of Economic Research, Inc.
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